Which is better?  Buy a house or rent a house?  This discussion is all about the math not the emotion of buying a house.  There is lots of information about renting a house is better than buying a house and we work through the math.  You can text me 214-226-0885 and i will run the math for you or you can go to my website. www.anthonypatton.loan   or my calculator https://lo.primelending.com/anthony.patton/calculators/rent-vs-buy to help you run the math yourself.  

anthony patton

Simple steps to getting a mortgage and understanding why you can't DIY

Five Mistakes to Avoid When Buying a Home!

Buying a home is a very exciting time for anyone!  There are many emotions and feelings that a buyer experiences during the process and buying a home is no-doubt, a process that requires a lot of focus and attention to details.  There are many “moving parts” within the home buying process and unfortunately, there are many things that can go wrong when buying a home.  There are mistakes that buyers make that are more common than others!  These mistakes can easily be avoided with proper research and preparation.

Here are five mistakes to avoid when buying a home!

Not Getting Pre-Approved

For starters, a pre-approval is very different than a pre-qualification.  A pre-qualification can normally be obtained by a simple phone call to a mortgage broker.  A mortgage broker will use information, such as income, debts, and assets, that is provided to them by the potential borrower to “qualify” them.  These pre-qualifications are subject to verification of the information provided by the potential borrower.  A pre-approval should be obtained prior to looking for a house in most cases.  A pre-approval requires a formal application be completed with the lender and the potential borrower will supply actual data (W-2’s, Tax Returns, Bank Statements, etc.).  Once this information is collected, the application and documents are either ran through an automated system or reviewed by a mortgage underwriter, who will determine if the buyer has been approved.  There are often only a handful of “conditions” with a pre-approval, such as a satisfactory appraisal being completed once the borrower finds a suitable property. We provide you with a certified homebuyer approval certifying you can purchase a home giving you peace and showing any potential seller you are serious.

As you can see, a pre-approval is not the same as a pre-qualification.  If a buyer doesn’t understand the difference, this can be a huge mistake.  In a real estate market that is seeing multiple offers on properties, having a certified approval can be the difference and help the buyer win in a multiple offer situation!  A buyer must also be aware that some lenders use the two words, pre-approval and pre-qualification, interchangeably, which is not correct.  Bottom line, get pre-approved!

Selecting the Wrong Real Estate Agent

There are many things that a real estate agent must do to be successful, some may consider a great real estate agent a “jack-of-all-trades.”  A great buyer’s agent should be seen as an expert adviser, not a “salesperson.”  They need to be able to discover the needs and wants of a buyer, educate them on current market conditions, help buyers locate homes that can potentially suit their needs, and much much more!

In addition to the real estate “skills” that a great buyer’s agent needs to have, there are also other things that should be taken into consideration.  It is important that a buyer feels comfortable with their real estate agent, as there are sometimes personal topics discussed, such as finances.  It’s also important that a buyer understands how their real estate agent is able to communicate and determine if it’s going to work for their situation.  If a buyer prefers e-mailing, then they better make sure their real estate agent is abl

Buying a home is not the same as selling a home.  The process is different, the feelings you experience are difference, and the emotions are different.  Since buying a home is different than selling a home, it’s obvious that the qualities you should look for when hiring a real estate agent are going to be different as well.

Real estate agents who represent buyers are commonly known as a buyers agent.  Real estate agents who represent sellers are commonly known as a listing agent.  Knowing how to interview a Realtor when selling a home is extremely important and it is no different than selecting a real estate agent to serve as your buyers agent.

In most real estate markets there will be a much higher percentage of buyers agents than there will be listing agents.  The 80/20 rule is also in effect with buyers agents just like it is with listing agents.  If you are unfamiliar with the 80/20 rule, it’s simple.  80% of the buyers will be represented by 20% of the buyers agents in the market.  In some communities, believe it or not, this ratio is even higher.

Whether it’s the first or tenth home youre buying, how do you know that you will be represented by Realtor who falls in the 20% group?  There are no guarantees, however, by correctly interviewing Realtors when buying a home, you have a greater probability of hiring a great buyers agent.  

We only work with the best expert advisers and we can help you with a few tips…

Financing is a very popular subject when buying a home, especially for the first time.  When interviewing a buyers agent, this is a good question to consider asking.  The responses that will be received will vary, however, a great real estate agent will answer this question with a resounding “yes.”  It’s critical that when buying a home, a buyer gets pre-approved before looking at homes.  

A buyers agent who shows dozens of houses before getting a buyer pre-approved (or at the very least, pre-qualified) is doing a huge disservice to that buyer.  It’s important that a potential buyer has a strong grasp on the type of financing they qualify for and the amount they qualify for and bottom line, if they are able to purchase a home at that specific time.  This can help eliminate disappointment, heartbreak, and also save a buyer lots of time!

We make sure you have an approval and in most cases give you a certified home buyer status to help you. 

Real Estate Experience

This question is one that cannot be missed.  Experience in the real estate industry is important.  The longer a real estate agent has been selling real estate, the more transactions they have likely completed.  It’s not impossible, however, that a real estate agent who has been in the business for two or three years and has done enough transactions to fall into that 20% group!

When buying a home, it can be a time consuming process.  As a buyer you have a job, family, and other responsibilities.  It’s important that your buyers agent is available when it’s convenient for you.  A part-time real estate agent may not be able to offer enough availability to do so.  If the best time to view potential homes is at 1:00PM on weekdays then that is when your buyers agent should setup the appointments.  A part-timer may not be able to due to another job or responsibility.

Real Estate Track-Record

As a r

How much down payment do I need? ? 

Great question I hear it all the time… and the answer… it depends…. 

Different types of loans require different types of down payments… 

USDA loans are United State Dept of Agriculture has a loan called rural development for people that want to buy houses outside of the urban and suburban areas.. these loans don’t require a down payment. The area is limited and is set each year by the USDA… they have a map on their website that allows you to see where you can buy a house using USDA and where you can’t…. 

VA Loans are loans for Veterans… they don’t require a down payment up to $484,350 and then above that there is a strange calculation about how much you need to put down…. 

Conventional loans are a mixed bag… on some loans you can put down as little as 3% of the sales price… so.. 6000 on a 200,000 purchase price… you can also choose 5% 10% 15% 20% or any other combination… there are pros and cons with all these figures. The major pro/con is mortgage insurance. 

Mortgage insurance is the insurance you pay to protect the mortgage company in case you don’t pay for the mortgage. The cost of mortgage insurance depends on the down payment and your credit score…. 20% down and your cost is zero…. 

10 % down has a higher cost than 15% down and 5 down has a higher cost than 10% down… but when your mortgage gets paid down or the value goes up and you reach 80% loan to value…. Then the mortgage insurance goes away… 

750 credit score has a cheaper mortgage insurance cost than a 650 credit score,….

Typically if you have less than 700 credit score… or less than 10% down we may need to look at an FHA loan because the FHA loan mortgage insurance will be cheaper than convention mortgage insurance

FHA has its own version of mortgage insurance and while it is cheaper in some cases… the mortgage insurance does not go away like on conventional mortgage… 

So which one is best for you… it depends…. This is why you need an expert advisor like me to help you compare… we have several tools to help you compare and make the best decision for you… this is why you need an expert advisor over some do it yourself online mortgage company that does not care about you and your family… 

We can also look at a list of down payment assistance programs to see if you qualify for them and if they are a right fit for you. 

This is why our clients have financial peace and can sleep at night and why other people are worried all through the home buying process.. 

I hope this helps… we are here for you all along the journey… if you want proof our reviews are online… or I can send you a list of happy customers… 

Don’t worry we have this… get some sleep…. 

www.anthonypatton.loan

www.inspiredbuyrealestate.com

214-226-0885

A word about mortgage rates… 

What is my interest rate… and how do you decide? 

What is life without a little risk? But in reality risk determines rates... 

Risk? Risk of what? Well the truth is the risk that you will not pay your mortgage back… I mean they are lending you a lot of money to buy this house… and what if you don’t pay it back? Oh you can think that the mortgage is secured with the house and they will get their money back but more often than not the lender does not win when they foreclose despite all the fake news about mortgage companies wanting to take people’s houses… they don’t they want their house back.. they want their money…so there are really two determining factors to risk… 1 is how much does the buyer… that would be you…. How much do you have invested into the property…? How much money did you put into the deal when you bought it… was it 0% or 3% or 10% or 20% or more… think about it this way… if you were the bank... and you loaned someone some money to buy a 300,000 house… how safe do you want to be… do you want to loan someone 300,000 to buy a 300000 house? Or would you feel better if you loaned them say 290,000 and the person brought their own 10,000 … would you feel better if you loaned someone 240,000 and they brought their own 60,000 to the deal? I hope you see the point… if you were the bank… and say you have three people wanting loans… and one person had no money into the deal… one person had 10,000 one person had 60,000 do you think your risk of foreclosing is the same for all 3 people… well no its not… so you offset risk with return…. The higher the risk the higher the rate of return… this is a concept we understand with our own savings…. do we put our savings in a savings account where we know it is safe then we will get a low rate of return… if we move to stocks we might lose it but we might get a higher return on our investment… if we move to drilling oil wells… super high risk we could drill and oil well and not hit oil… but also super high return IF we hit oil…. 

Besides down payment... the other factor that goes into rates is credit score… a credit score is between 300-850… the score is calculated by comparing the historical performance of thousands of profiles compared to your profile, how much credit you have… how long you have had credit and how well you pay your bills…the higher the credit score the lower the risk of foreclosure…. So you’re the bank… and you have 3 people… person A has a 620 score... person B has a 700 score and person C has an 800 score…. Who do you think is the best risk...?

Who do you think will pay you back and who do you think might not pay you back…. Ok… so you want to loan all three of them money but with the 620 guy you want a little more return on your investment maybe 5% but on the 800 score person.. you still have risk but not as much as the 620 guy so maybe his rate is 4.75%... so when you add the two factors…. Down payment and credit score…. You get a pretty good idea what your risk of foreclosure is… and if that guy is going to pay you back…. And then you set up a formula that calculates those factors and sets a rate for every conceivable scenario… and you tie that factor to the bond market where mortgage backed securities are traded on the open market… now as the stock market goes up and down and the bond market goes up and down the mortgage rates go up and down for any given situation…. … 

What are they today… well it depends… what the bond market doing and what is your credit score and down payment? 

Now there are ways we can manipulate your credit score to get you from 620 to 800… listen to our credit scores podcast…. 

I hope this helps… we are here for you all along the journey… if you want proof our reviews are online… or I can send you a list of happy customers… 

Don’t worry we have this... 

Contact  me...

Mortgage approvals…. Am I approved…? 

How much can I afford…. 

How much are my payments

What is the interest rate?

Should I lock the rate… what even does that mean?

How much is the down payment

All these are questions that keep people up at night when looking to buy a house. Let’s jump right in and put you at ease… We have helped thousands of families buy houses...and once we start helping you we are available to you all the time. That is different than most banks and lenders... all these advertisements about doing it yourself are just that… advertisements…. This is the biggest purchase you have ever made... you don’t want to be doing it on your own you want an expert advisor available at any time for you to ask questions… 

We are available via text, email, phone or face to face visit. 

Now let’s answer your questions…. Am I approved… there are three ways to be approved… 1 is considered a pre-qualification this is where we get a general idea of your income and credit based on a conversation or on line application and we tell you that you are qualified to buy a house…. It’s worth a little peace of mind but that’s about it…. 2 is an approval… this is where the automated system calculates your credit scores, down payment amounts, debt ratios and says yes you are approved…. Assuming you can prove your income and assets… 3 is a certified home buyer approval… this is where our special underwriter certifies your income and assets and says YES go buy a house up to xx amount… basically it is a blank check that give you a rock solid approval. This not only gives you peace but also helps prove to the seller you are serious about buying their house AND you can afford it…. Speaking of that…. How much can you afford?? This is where all the online calculators and automation loses touch with reality… this is why you want an expert advisor like me to talk with you.... after 30 years in the mortgage and real estate business we have seen a thing or two and can help you decide what you can afford. Just because some online calculator says you can afford a $3000 house payment doesn’t mean you SHOULD buy a house with a $3000 house payment…. I see it all the time... we want you to own a house that helps you reach financial peace… not sleepless nights…. Online rocket mortgage type companies don’t talk about that… we start by talking about how much you want your house payment to be each month and how much you can budget for a payment… once we understand your goals… now we can talk about what you can afford… 

So what’s the rate? I can guarantee you the rate is changing… and if I tell you a rate today… it will be different tomorrow… It’s kind of like gas prices… if you need gas today… then today is when you buy gas… the fact that it was 1.23 or 4.23 last week doesn’t really matter because I need gas today…. Mortgage rates are based on whatever the stock market and bond markets are doing…. Sometimes there is a little trend up or a little trend down but our suggestion is that we lock in the rate as soon as you find a house…. No stress no pressure… just lock it in when you find a house… well what about the guy down the street or the bank across town or someone on line is quoting some crazy rate… again back to the gas price analogy… gas prices across the country vary depending on where you are… but they are fairly close in range…. Sure one guy may be at 1.99 and the guy on the other corner is 1.97 or 2.03 but it’s all fairly close… the same thing with mortgage rates… you may have one guy quoting 4.25% with $500 in fees and another guy … 4.125 with 850 in fees or even 4% maybe 4.5% with zero fees… but it’s all going to be about the same… and there are ways to truly compare…the question that keeps people up at night is how do I know I am getting a good deal.? I can help you with that…. We monitor all our competitors and compare all our rates and fees

Let’s talk about CREDIT and specifically credit scores…. Every lender uses credit scores to decide if they will grant you a loan… and what the interest rates will be…  It doesn’t matter if you need a credit card or a loan to buy a car or a mortgage to buy a house.  WHY!? The credit agencies compare everyone’s credit situations and have built a computer program that predicts the future credit performance based on the credit past. 

The program then tells a lender the likelihood you will pay on time…. Someone with a 560 credit score is less likely to pay on time than a 720 credit score person. The credit scores range between 350-850 and are associated with the overall historical performance of a given profile… WHAT ??! The computer algorithm looks at your credit profile and decides a number based on what it sees… and it gets that number from similar profiles and pay histories of all the other people.  There are lots of factors that determine the number…. including payment history if you are paying on time or if you are 30 days or 60 days or 90 days late. 

The amount of debt meaning how much you actually own vs your credit limits

Credit history length meaning have you had credit for 3 weeks, 3 years or 30 years… 

Amount of new credit have you opened a bunch of new credit cards or car loans recently

And credit mix… what type of credit do you have? Is it all credit cards or student loans or a mix of everything…. 

And how many inquiries have you had recently… are you out shopping for a car or house or both?

The main driver in score primarily is pay history…. But it is followed closely by amount of credit owed vs amount of credit limit

Typically above 600 credit score will qualify for a house but the better the credit score the better the rate…. Above 640 gets a better rate… above 680 gets a better rate that 640 and then above 720 will get a better rate than 680… 

Here is the great news Because a credit score is computer generated we have tools that help us analyze where your scores are today and what we can do to improve them by running a WHAT IF Credit score tool…. 

Just last month we had a client with a 620 credit score…. They had an ok situation but with a little help from our tool we were able to identify two small changes that boosted their credit score from 620 to 680 this lowered their interest rate .50 a point and lowered their monthly payment $50

Credit card debt is bad… mainly because they monitor your scores and if things get a little out of line they start raising the interest rate on your credit card making them more money…. And possibly placing you in a worse position. If there is a way to get your credit card debt down you will be better off…. However, if you pay it to zero…. Sometimes we can see the credit score drop because the system doesn’t give you enough points for paid off debt… remember this is a computer… a zero credit card balance with a 5000 credit limit is potentially riskier than a 1000 credit card balance with a 2000 credit limit…. Make sense? 

I feel like I say this every episode…. Stay off click bait sites and fake new sites like kredit karma… #1 they are not giving you the real credit score and #2 they are just trying to sell you something… and I know people say oh but its free…. Uh no its not… there are only a few free websites…. And even they want something…. Either money or information….. 

Historically noncredit users were penalized... so if you didn’t have a credit card you had no credit score so you couldn’t buy anything because of the zero credit score…. Well how do you get a credit score if you can’t buy anything because you have no score?? 

We can help with that…. 1 you don’t have to have a credit score…. 2 we can now build a credit score using your checking and savings information…. 

If you don’t know yo

Whether a buyer is purchasing their first home or their fifth home, the home buying process can create lots of emotions and stress.. one way to handle the stress is ask lots of questions… 

There are no dumb questions so if you have a question…. ASK!!!! 

In today’s episode have found our dream house….. You made the offer…. They accepted….. 

NOW WHAT… these are Questions people ask after the contract is accepted….

What’s the next step?

 Between contract acceptance and the closing date, there are many things that need to be completed.  In a nutshell, after an offer is accepted, generally any inspections will be completed. We recommend a home inspection because the expert advisors will uncover anything that you may not notice and the seller does not tell you. Over the years I have seen home inspections uncover things that helped save the buyer thousands in repairs and undisclosed damages. Sometimes the buyer decided the problems are too much and they decide not to purchase the home…. I have also seen people skip the home inspection and later find water damage and it costs them thousands to repair. 

After the inspections, we would complete an appraisal… the appraisal compares the house you want to buy with all the other houses in the area that have sold in the last 90 days. This will tell us how much the house is worth…. Regardless of how much the contract states…. 

What if the house does not appraise for the sales price? 

We have some options…. 1. You can pay the difference. 2. You can ask the seller to lower the sales price … or 3 although rare you can walk away…. Most of the time the contract is written in a way to protect you from paying more than the house is worth…. I mean you don’t go to McDonalds and give them $10 for a Big Mac Meal when the menu says its 5$.... Our expert advisors will help you decide what is best.  . When buying a home, finding the perfect home is only one part of actually becoming a homeowner.  The mortgage process should be all complete but depending on how long you have been looking for a house we may need to update some documents… we need to lock in your interest rate… and make sure you are happy with the terms of the mortgage. 

What is all this insurance… title insurance, mortgage insurance home owners insurance?? 

Title insurance… is the policy that insures you own the house... and the sellers liens are paid off. The contract specifies who is paying for the title insurance. Typically the seller pays for this insurance but each contract is different and so you the buyer could be paying for the title insurance. Typically it is 1% of the sales price so $1000 per 100,000 in sales price. You need an expert advisor on your side making sure you are protected… because the seller is not going to pay for it out of kindness.

Let’s talk about mortgage insurance…. So mortgage insurance is the insurance you pay that covers the mortgage company in case you don’t pay your mortgage payments. The cost of the mortgage insurance is paid for by you the buyer… and the cost depends on lots of factors… how much is your down payment? What type of loan do you have… what is your credit score. 

This is where an expert mortgage adviser can save you thousands of dollars… An FHA loan always has mortgage insurance regardless of the size of your down payment. A conventional type loan has mortgage insurance if you have less than 20% down payment… the lower the down payment the higher the cost of mortgage insurance…. The lower the credit score the higher the cost of the mortgage insurance. We have a tool that compares all types of loans and shows you the costs and we help you make the best decision… its really all just math and when you see the math it usually makes the decision easy.

Finally we tal

Whether a buyer is purchasing their first home or their fifth home, the home buying process can create many emotions and feelings.  One of the best ways to ensure the process is not overwhelming for a buyer is to be well educated and properly prepared for the process.

There are no dumb questions and I am sure we have heard them all…. But if you have a question…. ASK!!!! 

We have found our dream house….. now what…. 

Questions Asked While Placing A Purchase Offer

When buying a home, you are the only one who can determine how much you should offer a seller.  Certainly it’s suggested you ask for your Realtors advice and thoughts, but ultimately you are the only person who can determine how much you should offer.

An earnest money deposit is also frequently referred to as a good faith deposit.  When a buyer purchases a home, they provide the seller’s real estate company a deposit to hold in their escrow account.  The primary purpose of this deposit is to show a seller you are serious about purchasing their home.  The amount that is deposited is subtracted from the final figure that a buyer pays at the closing table.  In most cases, the larger the deposit, the stronger a purchase offer looks to a seller. Typically $500 to $1000 but in a super competitive environment with a fabulous house…. We may want to talk about a different figure…. 

There is not a standard answer to this question.  Typically the seller has 12 to 24 hours… but sometimes it can take 3 or 4 days depending on the seller’s situation.    Your Realtor should have an idea based on talking to the seller’s realtor…. If you’re looking to purchase a home that is newly listed and the possibility of multiple offers exists, they will probably make a decision quickly  If the seller is located out of town, it make take a few days 

What if my offer is rejected?

When a purchase offer is submitted to the seller there are generally a couple of possible responses.  The first is an accepted offer meaning you go the house, the second is a counter offer meaning they want to sell you the house but there is something in the contract they want to negotiate…. Sometimes its price but other times it could be closing date or possession date… the third is a rejected offer, If your offer is rejected, meaning the seller says no and doesn’t counter offer, you have the right to place another offer.  It’s not very common an offer is rejected or not responded to, unless a seller is offended by a low-ball offer.

When buying a home, you have the option to perform several types of inspections.  The purchase offer you write can be contingent upon a satisfactory home inspection, pest inspection, chimney inspection, radon test, and many other inspections.  In most cases, it’s recommended that when buying a home, you at the bare minimum have a home inspection.  There are home inspection findings that are more common than others, however, no two homes are the same so it’s a great idea to get the home inspected.

Our team of expert advisors can help you with any inspections…. 

Next time….;. Your offer was accepted…. Now what? 

Our expert advisors are here to help you all along the way... we can help save you thousands and take the stress out of your way… 

Give me a call